Anemia is a debilitating condition that causes significant morbidity and mortality. It is a common condition caused by multiple etiologies and has a significant negative impact on quality of life. In the clinic, treatments for anemia are designed to raise hemoglobin levels and improve oxygen delivery to the tissues. Recent work, however, suggests that the primary therapies for anemia, transfusion therapy and treatment with recombinant erythropoietin (Epo), can themselves cause pathology. These observations underscore the need to develop new, effective long term therapies to treat anemia. In healthy individuals, the bone marrow constantly generates new erythrocytes to replaced worn out cells. This process is referred to as steady state erythropoiesis. In response to acute anemic challenge, the situation is different. Tissue hypoxia initiates a physiological response designed to increase oxygen delivery to the tissues. At these times stress erythropoiesis predominates. Most of what we know about stress erythropoiesis comes from the study of murine stress erythropoiesis. It is an extramedullary process that takes place in the fetal liver during development and the adult spleen and liver. Stress erythropoiesis utilizes a specialized population of erythroid progenitors that are distinct from steady state progenitors in that they ca rapidly generate large numbers of new erythrocytes. Stress erythropoiesis is regulated by signals not associated with steady state erythropoiesis. Our previous work identified a population of stress erythroid progenitors that exhibit stem cell properties. These cells could be serially transplanted into irradiated mice, where they maintained erythropoiesis without contribution to other lineages until surviving stem cells could repopulate the mouse. The transplanted stress erythroid progenitors establish a durable stress response compartment that can then respond to subsequent anemic challenges. Thus a better understanding of the mechanisms that regulate stress erythropoiesis will identify new targets for therapeutic intervention. In this proposal, we outline experiments designed to understand the mechanisms that regulate the expansion of immature stress erythroid progenitors and the signals that promote their differentiation as these regulatory points represent points in the pathway that could be exploited in the development of new therapies for anemia. In Aim 1, we will investigate the mechanism by which signals from the microenvironment regulate the expansion of immature stress progenitors. In the second aim, we will examine how Epo acts on macrophages to change their signals from those that promote expansion and self renewal to signals that promote differentiation. In the final aim, we will examine the mechanism by which differentiation signals generated by macrophages promote the transition from amplifying stress erythroid progenitors to differentiating stress erythroid progenitors.